Getting ready for a new baby comes with a huge checklist of things to do, and financial planning generally doesn’t make the cut. Before you take parental leave, you’ll want to have your financial house in order. We spoke with Certified Financial Planner® professional Sterling Rempel about considerations he would add to the usual preparations when expecting your child.

Know Your Budget and Cash Flow


Since there will be a short-term cash flow impact for the parent who takes time off work, take a hard look at:

  • Where the cash is going

  • Spending patterns

  • Areas where everyday spending can be cut

Sterling recommends having a look at regular, day-to-day spending over one to two months to clearly see the patterns and where changes can be made. “I find the act of measuring something changes behavior. It’s like a food log that way: I’m not going to have a treat if I know I’m going to have to write it down.” He also recommends paying yourself an allowance to make it easier to stick to a budget- “once it is on a credit card, it can easily be forgotten.”

To draw up the budget, Sterling recommends subtracting all work-related expenses such as gas, lunches and clothes that the stay-at-home-parent won’t have when the baby comes.


Work Out Your Benefits in Advance


If you’re on group benefits at work, you may have the option to pay for group benefits coverage during your parental leave, so you’ll want to consult with HR or your plan administrator to make sure this is done. If you are losing benefits and getting onto your partner’s plan, Sterling suggests you do it early, as some plans may consider you a late applicant and severely restrict benefits if you don’t do it within 30 days of your old plan termination. For women, Sterling recommends applying for life or disability insurance earlier in the first trimester, as some insurers may not cover you if you apply in the second or third trimesters.

Once your child is born, talk to your group benefits provider to understand your options for covering your child. A review of your wills and insurance—including disability/critical illness insurance—is also advisable at this time. Sterling says that having a will is critical when you have a child because it gives you greater control over how your estate will be managed, and by whom.

Want an RESP? Your Child Will Need a SIN


A popular way for family to celebrate the birth of a child is to contribute to a Registered Education Savings Plan (RESP). If you want to set one up, you’ll need to register your child for a Social Insurance Number (SIN). This is something new parents rarely think because most adults typically only got their SIN when they started their first job.

If you want to establish something more substantial than a RESP, according to Sterling, it is important to identify a trustee to act as an administrator for funds until the child is of legal age. Writing your will and, where necessary, appointing your own trustee, ensures that a provincial public trustee does not become obligated to step into administer the children’s funds in the event that you die without a will. Your estate is divided between your partner and any minor children you may have in the event of your death, and a will designating that all your funds go to your partner for management is necessary to prevent the trustee’s involvement. 

Having a baby is a very exciting time for any new parent, and you can take the financial stress out of the happy event by seeing a CFP professional.

To find a Certified Financial Planner® professional in your area that will help guide you financially, use our Find Your Planner tool.

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